GSE Environmental Looks to Clean Up With IPO

Financials look solid in long-term growth sector

The roots of GSE Environmental go back to 1981, when Clifford Gundle saw an opportunity to create waste-management lining systems using high-density polyethylene. The business grew quickly and the company eventually went public in 1986. After a string of acquisitions, the company went private in 2004.

But now GSE Environmental wants to go public again. It plans to issue 9 million shares at a range of $13 to $15. Underwriters include Oppenheimer and FBR Capital, and the proposed stock symbol is GSE..

GSE is now a global operator of engineered geosynthetic containment solutions, which help industrial clients deal with environmental regulations. Its suite of products spans industries like mining, waste management, coal and shale oil. Often, they help prevent the leakage of toxic substances into the soil and ground water.

A strategic advantage for GSE is its massive global platform. The company makes more than 110 products in seven manufacturing facilities across the world. There are also 18 regional sales offices.

Because of its platform, GSE can deliver its products under strict schedules as well as provide low-cost sourcing of materials. It also helps to better tailor solutions to customer complicated needs.

GSE has more than 1,300 customers, with none accounting for more than 5% of revenue. Some of its customers include Barrick Gold (NYSE:ABX), BHP Billiton (NYSE:BHP), Newmont Mining (NYSE:NEM) and Waste Management (NYSE:WM).

The financials are also definitely compelling. As of the end of September, sales increased by 40% in the past 12 months to $443.5 million, and the company posted a $4 million profit.

Looking at the long term, the trends look positive. After all, the urbanization and infrastructure investments are likely to remain strong in the emerging markets like China and India. And this is likely to be the case in other areas, too, like Africa.

With its global platform and strong product line, GSE should be positioned nicely for continued growth.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

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